I keep hearing people (including SaltEMike in his video) suggest that the changes and announcement might be due to CIG being in financial trouble.
Prior to this I hadn't really given this much credence. I thought it was just hubris from CIG, blaming the backers, they've drank too much of their own kool aid, and thing that backers will keep giving them money no matter what they say or do (and history has tended to show this to be true).
I've thought things like, well, the funding tracker has to be at least broadly true, otherwise they would already be bankrupt. And CIG have been talking about expanding their business, new offices in Frankfurt and Manchester.
But now, i'm really starting to think this might all be a big smokescreen. CIG might be in full blown panic mode. Why did they talk about expanding their staff? Why did they have that article published aimed at the industry and investors, not the gamers, about the new office in Manchester? Could it be the financials aren't as good as they look? We know CIG has multiple companies in different countries, its possible to shuffle money around to make things look better than they are.
We know CR had to go cap in hand to Calder to get him to buy 10% of the company (and later another 4% was bought, which could have been a positive sign, that someone with board members was willing to invest more! But how much information was obscured from those board members? Were they hoodwinked?). CIG failed to notify backers about the sale/investment until after their big annual con. The sale took place before that. Were they worried about backer reactions?
What if... what if the puff piece about opening a new office, expanding the staffing, was really aimed at hyping up CIG as a growing company, one with a solid revenue stream, one worth investing in? Is CR casting around for new investors? Is he looking for another big cash injection? Is he ready to sell off another 10% or more of the company, the company backers paid to build, to another third party?
Is there something more to the choice of expanding in the UK rather than the US?
The more i think about this, the more i'm beginning to give credence to those who suggest CIG might be in financials dire straits. That all their recent actions have been designed to make CIG look good to investors, because CIG really need the money.
Just one problem, a really badly worded article blaming backers, that has generated a ton of negativity for CIG from backers, skeptics, and the gaming media. It would be impossible for any potential investors to ignore.
Did CIG just totally shoot themselves in the foot at a time when they were positioning themselves to look good to investors? They have shot themselves in the foot for sure, but how critical is it?
Or is all ok with the finances? That its just idle speculation?
If its really at the point that CR is looking for new investors, then either a) he will succeed, and we will eventually find out about it, when the file to make changes to the board of directors, which will be interesting to see how backers respond to CR selling more of the company (and how will Calder react to CR selling more of the company?) or b) they fail to get investors and CIG start downscaling and taking other actions that a company in financial trouble would take. And if this is the case, i suspect the end will come relatively quickly, because they don't have the reserves their financials would suggest, and backer confidence will quickly fade, leaving them running on gas.
If not, if all is good, then, some backers will leave, CIG will rope in new backers, and the cycle will continue, and we are in for another 10 years of alpha! And maybe i should cut back on the tinfoil!
Interesting times.
robertsspaceindustries.com
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